Foundem’s Recent Letter to the FTC

On December 31 2012, Foundem co-founders Adam and Shivaun Raff wrote to the FTC’s Commissioners and investigative team. The following is an excerpt from that letter:

We first came to you in May 2010 as an innovative vertical search company that had been deterred from entering the U.S. market by Google’s anticompetitive penalty and self-preferencing practices. We are writing to you now in response to recent reports that the FTC might conclude its antitrust investigation into Google without addressing these anticompetitive search manipulations. In our view, this would be a catastrophic mistake. It is no accident that search manipulation was the issue that sparked the U.S. and European investigations; its insidious, anticompetitive impact outweighs all of Google’s other anticompetitive practices by a considerable margin. While virtually undetectable to users, Google’s search manipulations lay waste to entire classes of competitors in every sector where Google chooses to deploy them.

Foundem is the company that first brought Google’s search manipulations to the attention of regulators on both sides of the Atlantic, and it has remained engaged with the ensuing investigations throughout. From this vantage point, we are concerned that the FTC’s reluctance to litigate against these abusive practices may stem more from misconceptions about the mechanics and financial incentives underlying the abuse than from the constraints of U.S. antitrust law.

In the familiar bricks-and-mortar world, Google’s anticompetitive behaviour would have been obvious to all. But, in the unfamiliar and seemingly impenetrable world of internet search, Google’s ability to get away with these practices has often depended on its ability to confuse, obfuscate, and intimidate.

…It is difficult to conceive of an antitrust case where the stakes for U.S. consumers and businesses could be any higher. Google has been dominant in the U.S. search and search advertising markets for more than a decade, and there is no sign of this changing anytime soon. As the gateway to the Internet, Google plays a decisive role in determining what the vast majority of Americans discover, read, use, and purchase online. The importance of deciding whether or not Google is allowed to manipulate this unparalleled and virtually unlimited power to its own financial ends cannot be overstated…